Question

I need help with required 1. Please explain how to get the calculations.

Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 30,000 to 50,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 45,000 units during the year at a selling price of $16 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 30,000 40,000 50,000 Total costs: Variable cost $ Fixed cost L 180,000 300,000 480,000 $ 300,000 300,000 300,000 300,000 Total costs $ $ Cost per unit: Variable cost $ 2.50 Fixed cost Total cost per unit $ 2.50 $ 0.00 $ 0.00

Answer 1

Fixed cost per unit = Total fixed cost/ Number of units

Fixed cost per unit when 30,000 units are produced = 300,000/30,000

= $10

Fixed cost per unit when 40,000 units are produced = 300,000/40,000

= $7.5

Fixed cost per unit when 50,000 units are produced = 300,000/50,000

= $6

Variable cost per unit does not change due to change in output. Hence, variable cost per unit will be $2.50 when output is 40,000 units/50,000 units.

Variable cost per unit = $2.50

Total variable cost = Number of units x Variable cost per unit

Total variable cost of 30,000 units = 30,000 x 2.50

= $75,000

Total variable cost of 40,000 units = 40,000 x 2.50

= $100,000

Total variable cost of 50,000 units = 50,000 x 2.50

= $125,000

	Units Produced and Sold
	30,000	40,000	50,000
Total costs:
Variable cost	75,000	100,000	125,000
Fixed cost	300,000	300,000	300,000
Total Costs	$375,000	$400,000	$425,000
Cost per unit:
Variable cost	2.50	2.50	2.50
Fixed cost	10	7.5	6
Total cost per unit	$12.50	$10	$8.50

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